Jan. 28 (Bloomberg) -- European rules on quotas for women
on company boards are necessary because businesses aren’t doing
enough themselves, according to European Union Justice
Commissioner Viviane Reding.

Reding made the remarks at a panel discussion at the World
Economic Forum in Davos, Switzerland. She set out draft
legislation in November asking governments and the European
Parliament to approve rules for a 40 percent quota to favor
women over equally qualified men for supervisory board seats.
She said Jan. 25 such legislation was needed as the population
ages.

In her remarks at Davos, Reding noted that 65 percent of
university graduates in Europe are female and the continent is
“not making use” of its talent. She argued that sometimes
“political leadership” is needed to change the business world.

More women gained a seat on management and supervisory
boards in 24 out of 27 EU countries last year, rising 2.2
percentage points to 15.8 percent in October from a year
earlier, EU regulators said in a statement Jan. 25. Ten percent
of management board seats and 17 percent of places on
supervisory, or non-executive, boards were held by women.

The measures would apply to about 5,000 listed companies in
the EU by 2020 and state-owned companies by 2018, and exclude
companies with fewer than 250 employees or global sales below 50
million euros ($67 million.)

They spoke at the World Economic Forum’s annual meeting in
Davos, Switzerland.

For the video, click here.

Miller Says AIG Is Redesigning Pay Plans, Incentives

Steve Miller, chairman of American International Group
Inc., talked about the company’s pay structure and succession
plans for Chief Executive Officer Robert Benmosche.

The company’s managers may get more incentive pay after the
insurer exited its U.S. bailout, ending government compensation
limits, Miller said.

He spoke with Erik Schatzker on Bloomberg Television’s
“Market Makers” on the sidelines of the World Economic Forum’s
annual meeting in Davos, Switzerland. Miller also discussed the
outlook for AIG’s sale of an 80.1 percent stake in International
Lease Finance Corp.

Swift Trade Loses Appeal Over $12 Million U.K. Market-Abuse Fine

Swift Trade, which was dissolved in December 2010, was
fined for “layering,” in which multiple buy orders for shares
are submitted and withdrawn to manipulate the price of a
security, the FSA said in an e-mailed statement. The practice
led to a “misleading impression of supply and demand and an
artificial share price,” the FSA said.

The Ontario Securities Commission also found that Swift
Trade breached securities laws by providing software and an
electronic trading system for around 4,500 unregistered traders
in 2008, according to a 2011 report. The company had appealed
the penalty at a London tribunal in June, saying that the fine
was “entirely disproportionate” to its activities.

Energy Swaps Shift to Futures as Dodd-Frank Rules Take Hold

More than half of the $18 trillion in notional daily
trading of energy swaps has moved to futures exchanges from the
over-the-counter market in response to the U.S. regulatory
overhaul aimed at increasing transparency following the 2008
financial crisis.

Intercontinental Exchange Inc. said 52 percent of its
energy futures volumes during the first half of January came
from contracts that before Oct. 15 were traded as swaps. CME
Group Inc. said about 90 percent of energy trades on its
ClearPort system are executed as futures, compared with 10
percent before the switch.

Volumes have soared at the two largest U.S. futures
exchanges as oil and gas companies seek to avoid higher costs
that come from being designated a swaps dealer under the Dodd-Frank Act, which the Commodity Futures Trading Commission said
is any firm that does more than $8 billion of the transactions
annually. The shift also helps Intercontinental and CME Group to
maintain their dominant clearing businesses.

The CFTC, which has been writing the swaps rules for more
than two years to improve oversight of a market that for three
decades had largely escaped federal regulation, has scheduled a
roundtable meeting on so-called futurization for Jan. 31. The
agency plans to meet with industry representatives to discuss
different collateral requirements between swaps and futures.

CFTC Chairman Gary Gensler, in an Oct. 10 speech at George
Washington University in Washington, likened the efforts to
securities rules enacted in the 1930s.

For more, click here.

SEC Said to Back Hire of U.S. Capitol Police Inspector General

The Securities and Exchange Commission has selected the
inspector general of the U.S. Capitol Police to be the agency’s
internal watchdog, two people familiar with the matter said.

Carl Hoecker has led the police department’s inspector
office since 2006, according to an online biography. A certified
public accountant who began his career as an Army military
policeman, Hoecker was previously deputy inspector general for
investigations at the Treasury Department. The Capitol Police
provide security on the grounds of the U.S. Capitol.

The appointment would fill the vacancy left by H. David
Kotz, who quit a year ago after criticism of his investigations
and possible conflicts of interest. The office has been run
temporarily by the inspector general of the Federal Deposit
Insurance Corp.

The SEC inspector general is an independent internal
investigator charged with ferreting out waste, fraud and abuse
inside the agency.

Courts

Obama Labor Board Recess Appointments Invalid, Court Rules

President Barack Obama’s recess appointments to the U.S.
National Labor Relations Board last year were “constitutionally
invalid” because the Senate wasn’t in recess at the time, a
federal appeals court ruled.

The decision could cast doubt on regulations passed by the
Consumer Financial Protection Bureau during the time it was
headed by another recess appointee.

The U.S. Court of Appeals in Washington in a unanimous
ruling Jan. 25 sided with Republican lawmakers and a canning
company that challenged the appointments. The judges said the
definition of “the Recess” in the Constitution’s Recess
Appointments Clause is limited to the period between one
Congress and the next, and that Congress had begun a new session
at the time the president made the appointments.

The Jan. 25 ruling is the first substantive decision by a
federal appeals court on several challenges to the president’s
naming of the NLRB members on Jan. 4, 2012.

Ohio Attorney General Richard Cordray was named the first
head of the Consumer Financial Protection Bureau at the same
time as the NLRB board members. Cordray’s appointment is also
being contested in a lawsuit in federal court in Washington.
Obama renominated Cordray Jan. 24.

Noel Francisco of Jones Day, who represented the canning
company challenging the appointments, said anyone subject to
regulations created by the Consumer Bureau would be able to file
a lawsuit in Washington challenging them under the argument that
Cordray’s appointment was invalid.

The case is Noel Canning v. National Labor Relations Board,
12-1115, 12-1153, U.S. Court of Appeals for the District of
Columbia (Washington).

Dowd, 37, who worked at a brokerage in Aventura, Florida,
learned that a Pharmasset director told his supervisors about
the deal before it was announced on Nov. 21, 2011, according to
a Federal Bureau of Investigation arrest complaint filed Jan.
25. He was told not to act on the information yet tipped a
childhood friend, identified as J.F.

Dowd, who was arrested at his home Jan. 25, is charged with
conspiracy to commit securities fraud and faces as long as five
years in prison if convicted. He appeared Jan. 25 in federal
court in West Palm Beach, Florida. A judge released him on a
$100,000 bond. He is scheduled to appear in federal court in
Newark, New Jersey, on Feb. 1.

Peter Willis, a lawyer for Dowd, didn’t immediately return
a call seeking comment on the charges.

The criminal case is U.S. v. Dowd, 13-mj-6515, U.S.
District Court, District of New Jersey (Newark). The SEC case is
Securities and Exchange Commission v. Dowd, U.S. District Court,
District of New Jersey.

Madoff Employees Questioned If Firm Was Scam, Ex-CFO Says

Frank DiPascali Jr., who pleaded guilty to helping Bernard
L. Madoff carry out the biggest Ponzi scheme ever, told FBI
agents that employees asked him if the business was a “scam”
before the world learned the truth.

DiPascali, who pleaded guilty to 10 criminal charges and is
cooperating with the U.S., gave extensive interviews to Federal
Bureau of Investigation agents as part of the probe. Two former
computer programmers at the firm, Jerome O’Hara and George
Perez, socialized and questioned ex-Chief Financial Officer
DiPascali about the legitimacy of Bernard L. Madoff Investment
Securities LLC during a dinner in 2006, DiPascali told the
agents. Details of the interviews appear in 60 pages of notes
included in a Jan. 25 filing that reiterate some of the FBI
reports made public in March.

Perez and O’Hara were charged with being part of the fraud
in 2009 and are awaiting trial.

The case is U.S. v. O’Hara, 10-cr-00228, U.S. District
Court, Southern District of New York (Manhattan).

Interviews

Obama Says White, Cordray to Help Protect Middle Class

U.S. President Barack Obama spoke about his nominations of
Mary Jo White to lead the Securities and Exchange Commission and
Richard Cordray to continue as the director of the Consumer
Financial Protection Bureau.

He spoke during his weekly address on the radio and
Internet.

For the video, click here.

Khuzami on SEC Leadership, Enforcement Actions

Robert Khuzami, director of enforcement at the U.S.
Securities and Exchange Commission, talked about the SEC’s
leadership, performance and enforcement actions in the post-Madoff era.

Comings and Goings

CFTC Commissioner Jill Sommers Will Resign After First Quarter

Jill E. Sommers, one of two Republican members of the U.S.
Commodity Futures Trading Commission, plans to resign from the
country’s top derivatives regulator after the first quarter of
this year.

She said in an interview that she has come to the decision
after “internally struggling about it for months.”

The five-member CFTC has spent more than two years writing
Dodd-Frank Act rules to bolster oversight of the $639 trillion
swaps market and the futures industry. The agency is preparing
to complete rules governing trading platforms after finishing
rules for data reporting and reducing risk by having trades
guaranteed at clearinghouses.

She said her intention is not to leave until after “this
last group” of Dodd-Frank rules.’’ She expects to leave
sometime after the first quarter of the year.

Sommers, 44, who has been a commissioner since August 2007,
was named the senior member overseeing the investigation into MF
Global Holdings Ltd. after CFTC Chairman Gary Gensler recused
himself. Gensler and former MF Global Chief Executive Officer
Jon S. Corzine worked together at Goldman Sachs Group Inc.

She said last year that the agency hadn’t adequately
considered public comments on proposed rules and lacked analysis
of regulatory costs and benefits.